The Long-Run Aggregate Supply Curve Is Vertical

question 2

Multiple Choice

The long-run aggregate supply curve is vertical:

• A)because the rate of inflation is steady in the long run.
• B)Input prices eventually rise in response to changes in output prices.
• C)because product prices always increase at a faster rate than resource prices.
• D)only when the money supply increases at the same rate as real GDP.

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Definitions:

Franchise

A licensing arrangement granting an individual or group the rights to market a company's goods or services within a certain territory.

Fixed Commission

A set fee or percentage of a transaction's value paid to agents or brokers for their services.

Sales Agents

Individuals or entities that are authorized to sell products or services on behalf of a company.

Pricing

The strategy or method a business uses to determine the cost to consumers for goods or services.